This is why Timmy was wrong for Sec of Treasury

Not secret for long.

The post implies that this was just revealed.  But, I was blogging about the situation on September 15, 2008, and while the deal came before the Congressional authorization of bailout funds, it did refer to Depression Era provisions of the Federal Reserve Act as authority for the action.

I don't recall denial at the time at the Treasury bailed out Bear Sterns to smooth out of takeover by JPMorgan Chase, which is how the popular press had described it.  My recollection was that this was known very soon after the fact, and AIG's discussions with the Fed were also known before the Lehman bankruptcy.

There is good reason to doubt whether these bailouts were a bad move.  I am among those who don't think that we made a mistake in allowing Lehman to go bankrupt.  

It isn't obvious that a sale of most of Bear Sterns to JPMorgan Chase out of bankruptcy, rather than with a federal bailout would have been worse, and it also isn't clear how much, if anything, the taxpayer will end up paying as a result of the Bear Sterns bailout.

AIG is the best case for systemic risk of the lot, but also the most likely to have cost the American taxpayers big bucks.  Certainly, it could have been handled better.

The GM bailout will be paid back by year end, with taxpayers getting a decent equity stake in the company and saving a lot of jobs in the bargain.  

The Chrysler bailout was a loss to the taxpayer on the order of $8 billion, which we are unlikely to recover from our 8% stock stake, and the company may yet fail.  But, job losses have been postponed as a result.

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by: ohwilleke @ Mon Apr 05, 2010 at 18:15:53 PM UTC